$45.6M revenue projected for CUC

The Commonwealth Utilities Corp. projects to turn a profit next fiscal year-a first in many years.

Based on financial records the agency made available to the Saipan Tribune yesterday, CUC expects its revenue to hit a total of $45.6 million in fiscal year 2013. This projection is based on currently approved rates with the assumption that rate increases for the foreseeable future will be minimal, if any.

According to Charles Warren, CUC’s chief financial officer, the agency projects revenue from power to total $25.7 million; water, $14.4 million; and wastewater, $5.4 million.

Minus the projected uncollectible of about 3 percent, or $1.3 million, Warren said that projected revenues will go down to $44.2 million.

Since the operations budget is projected at $41.7 million, this will give CUC a positive income revenue of $2.497 million next fiscal year.

Warren said that CUC will break even if debt servicing and capital outlays are factored into the equation.

Based on CUC records, its largest expense is fuel and lube, which it projects to reach $78.1 million next fiscal year. This factor is highly dependent on the market price of diesel. Included in the equation is the effect of various renewable energy projects that are expected to be online in 2013. CUC estimates that up to 36,978 megawatts of power will be provided under various power purchase agreements at an average cost to CUC of $0.205 per kilowatt-hour.

For personnel cost, the agency projects to incur $14.1 million, of which salaries and wages will amount to $10.3 million; employer contributions, $2.5 million; and overtime costs, $1.1 million. CUC’s full-time employee count is 391 and includes vacant positions that reflect the manpower requirements as mandated by the U.S. Environmental Protection Agency.

CUC projects to spend $3.1 million for professional services, which included regulatory fees to consultants and specialists, the 1-percent fee to the Office of Public Auditor, laboratory fees, legal fees, and other expert fees.

The total budget for repairs and maintenance is projected at $5.8 million: $3 million for the power division, $1 million for the water division, and $1.7 million, wastewater division.

CUC said that although it has rehabilitated its main generators and has greatly improved capacity, maintenance is an ongoing process and is vital to keep the power supply stable.

Saipan Tribune learned that the total maintenance budget is not enough to fund all maintenance costs. The planned maintenance work at the power plants has been deferred after the Commonwealth Public Utilities Commission declined CUC’s request for a full increase in its power rates.

CUC also projects to spend $15 million in 2013 to pay independent power producers that run Power Plant 4 and the power plant on Tinian, plus internal power usage costs for water and wastewater’s wells, pumps, lift stations, and treatment plants.

CUC has budgeted $1 million for supplies-for both administrative and operational items-while allocating $940,000 for other services such as security services as required by the U.S. Coast Guard for the power plant vicinities, treatment plants, and others. Other expense such as credit card fees is estimated at $300,000.